COVID-19, like an X-ray — to borrow an idea from United Nations secretary-general Antonio Guterres — is showing up a terribly unequal world.
How fractured a world we have built is revealed by Oxfam’s January report, “The Inequality Virus”. It is a very exclusive world, one where the richest 10 made half a trillion dollars since March. To be exact, 540 followed by nine noughts, as the British Oxfam would say.
It will not make sense to many but it is enough to pay for all the vaccines needed to jab 7.8 billion people and keep billions out of poverty. And still have a billionaire’s change to spare. If this isn’t bad enough, Jeff Bezos, the world’s richest man and founder of Amazon, made US$13 billion in one Monday last year.
The noughts behind the number could have saved so many from going to bed hungry, but didn’t. As Guterres put it to the world leaders at the Nelson Mandela Foundation annual lecture on July 18, Covid-19 has exposed the myth that we are in the same boat. In the same sea, yes, but “some are in superyachts while others are clinging to the floating debris”. The UN chief is right, inequality begins at the top. And the only way to get rid of it is to start there.
There are at least three places at the top the reform must reach. First is the UN Security Council, where, for seven decades, the permanent five — the United States, Britain, France, China and Russia — have been shaping the world as they fancy. It will be fine, if the P5 had shaped a just and fair world. Even on principle, 5:195 is a terrifying ratio. Between the P5, they decide who should be bombed out of existence and who should be defended. Even international legal institutions can’t touch them. In this P5 world, fair is foul, foul is fair, to borrow the words of Shakespeare. This isn’t the world order we need.
The second reform must address the Bretton Woods institutions, the World Bank and the International Monetary Fund. If the United Nations Security Council holds the lever of geopolitical power, the World Bank and IMF shape the development and financial world order.
The US and the United Kingdom, between them, have made sure Western free market capitalism has a global reach through the two institutions.
Free market capitalism is the third place where reform is badly needed. Even the World Economic Forum, where the owners of superyachts gather, has called for reset of the “winner take all” system that favours those with power. Here money buys power and power brings money in an unending vicious cycle. Like globalisation, which works very well for a few countries, free market capitalism works only for a couple of thousand billionaires.
None can be more forthright than Nobel prize-winning economist and author Joseph Stiglitz. In an interview with The Economist, he says capitalism is rigged to favour the rich and powerful and their children to enable the perpetuation of advantages. “In sector after sector, there are a few dominant firms that create almost insurmountable barriers to entry. Too many become wealthy not by adding to the size of the nation’s economic pie, but by seizing from others a larger share, through exploitation, whether of market power, informational advantages or the vulnerabilities of others.”
The cure? Progressive capitalism. Others call it compassionate capitalism. Whatever the capitalism, it must not leave everything to the market.